Clean Claims and Other Information for Health Providers
Because the Department of Insurance and Financial Services (DIFS) regulates the business of insurance transacted in Michigan, our authority pertains to contracts issued in Michigan. DIFS generally only accepts complaints from parties involved in the contract, such as the insured, policyholder or certificate holder. Because a health care provider is usually not a party to the health care contract, we generally do not accept complaints from providers. There are some exceptions to this policy, however.
DIFS will pursue appropriate complaints from participating providers acting as the authorized representative of a patient covered by a Michigan licensed health carrier; however, written authorization from the patient or their legal representative must be included with the complaint.
Complaints involving out-of-state health care plans should, in most cases, be pursued by the patient with the insurance regulatory agency of the state where the health care plan was issued or delivered.
Additional DIFS regulatory assistance to providers is explained below.
Providers occasionally have problems with receiving timely payment for submitted claims without any errors or other issues, often referred to as “clean claims”. Section 2006(7) to (14) of the Insurance Code was enacted to promote the timely handling of clean claim payments.
Definition of a Clean Claim
A "clean claim" means a claim that does all of the following:
- Identifies the health professional, health facility, home health care provider, or durable medical equipment provider that provided service sufficiently to verify, if necessary, affiliation status and includes any identifying numbers.
- Sufficiently identifies the patient and health plan subscriber.
- Lists the date and place of service.
- Is a claim for covered services for an eligible individual.
- If necessary, substantiates the medical necessity and appropriateness of the service provided.
- If prior authorization is required for certain patient services, contains information sufficient to establish that prior authorization was obtained.
- Identifies the service rendered using a generally accepted system of procedure or service coding.
- Includes additional documentation based upon services rendered as reasonably required by the health plan.
Submitting a Claim to a Health Plan
A health professional, health facility, home health care provider, or durable medical equipment provider (“health care providers”) must bill a health plan within 1 year after the date of service or the date of discharge from the health facility in order for a claim to be a clean claim.
The initial submission of the claims and all other notices required may be made in writing or electronically.
Clean Claim Payment
A clean claim must be paid within 45 days after it is received by the "health plan." The 45-day time period is tolled from the date the health plan notifies a health care provider that the claim contains defects. A health plan must notify the health care provider within 30 days after receipt of the claim by the health plan of all known reasons that prevent the claim from being a clean claim.
If a health plan determines that 1 or more services listed on a claim are payable, the health plan shall pay for those services and shall not deny the entire claim because 1 or more other services listed on the claim are defective.
A health care provider has 45 days, and any additional time the health plan permits, after receipt of a notice to correct all known defects.
If a health care provider's response makes the claim a clean claim, the health plan shall pay the health care provider within the 45-day time period, excluding any time period tolled.
If a health care provider's response does not make the claim a clean claim, the health plan shall notify the health care provider of an adverse claim determination and of the reasons for the adverse claim determination within the 45-day time period.
A health care provider shall not resubmit the same claim to the health plan unless the 45 day time frame has passed.
Penalties for Late Payment of a Clean Claim
A clean claim that is not paid within 45 days shall bear simple interest at a rate of 12% per annum. The Director of DIFS may also impose a civil fine of not more than $1,000.00 for each violation not to exceed $10,000.00 in the aggregate for multiple violations.
Filing a Clean Claim Complaint with the Department of Insurance and Financial Services
A health care provider alleging that a clean claim has not been timely processed or paid may file a complaint with DIFS on form FIS 0284 and has a right to a determination of the matter by the Director or his or her designee. A health care provider, or health plan may also seek court action.
A health care provider can file a clean claim complaint. Individuals or policyholders cannot file a clean claim complaint.
A health plan shall not terminate the affiliation status or the participation of a health care provider with a health maintenance organization provider panel or otherwise discriminate against a health care provider because the provider alleges that a health plan has violated Section 2006(7) to (14) of the Insurance Code.
Section 2006(7) to (14) of the Insurance Code does not apply to claims arising from pharmacies, claims arising out of Sections 3101 to 3177 of the Insurance Code (No Fault Auto claims), an entity regulated under the Worker's Disability Compensation Act of 1969, 1969 PA 317, MCL 418.101 to 418.941, the processing and paying of Medicaid claims that are covered under Section 111i of the Social Welfare Act, 1939 PA 280, MCL 400.111i, claims from Medicare or Medicare Advantage plans, or claims from self-funded health care plans.
Medicaid HMO Clean Claims
Under MCL 400.111i, Medicaid providers may file clean claims with the Director against Medicaid HMOs for timely payment for the claims that have been submitted electronically. Ordinarily a clean claim must be paid within 45 days after receipt of the claim by the qualified health plan. A "clean claim" must meet certain criteria set forth in the legislation and must be submitted on form FIS 0278 which can be accessed through the website for the DIFS.
Other Definitions Relevant to Clean Claims
Health facility means a health facility or agency licensed under Article 17 of the Public Health Code, 1978 PA 368, MCL 333.20101 to 333.22260.
Health professional means a health professional licensed or registered under Article 15 of the Public Health Code, 1978 PA 368, MCL 333.16101 to 333.18838.
Health plan means all of the following:
- An insurer providing benefits under an expense-incurred hospital, medical, surgical, vision, or dental policy or certificate, including any policy or certificate that provides coverage for specific diseases or accidents only, or any hospital indemnity, Medicare supplement, long-term care, or 1-time limited duration policy or certificate, but not to payments made to an administrative services only or cost-plus arrangement.
- A MEWA regulated under Chapter 70 that provides hospital, medical, surgical, vision, dental, and sick care benefits.
- A health maintenance organization or alternative financing delivery system licensed or issued a certificate of authority in this state.
- A health care corporation for benefits provided under a certificate issued under the Nonprofit Health Care Corporation Reform Act, Public Act 350 of 1980, MCL 550.1101 to 550.1704, but not to payments made pursuant to an administrative services only or cost-plus arrangement.